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US stocks close higher on positive trade sentiment, close to session highs

Dec 03, 2018

 

US Markets End of Day Snapshot

  • US stocks close higher, close to the highs of the session, with positive trade sentiment fueling risk-on
  • The S&P 500 finished up 1.09%, Nasdaq Composite up 1.51%, and Russell 2000 up 1.02%
  • Part of the yield curve inverted today with the difference between 3 and 5 year bonds dropping below zero 
  • Amazon (AMZN) was briefly the most valuable US company during today's session
  • Energy (+2.28%), Consumer Discretionary (+2.21%), and Tech (+2.11%) stocks were the top performers in the S&P 500 today
  • Real Estate (+0.36%), Telecom (+0.08%), and Consumer Staples (-0.09%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished positive with the advance/decline ratio for the S&P 500 closing at 3.35x
  • 97 stocks in the S&P 500 hit 4-week highs while 14 stocks reached 4-week lows
  • 18 stocks in the S&P 500 closed overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • 71 stocks in the Nasdaq Composite hit 4-week highs while 105 stocks reached 4-week lows
  • 318 stocks in the Nasdaq Composite closed overbought while 214 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished lower at 16.44 after closing at 18.07 yesterday
     

Stocks Trending in the News

Click name for Q-Factor rating and financials data.
 

  • Accor SA (ENXTPA: AC)Vinci SA (ENXTPA: DG), and Carrefour SA (CA) shares are all trading lower amid the “Yellow Vest” protests in France on Saturday concerning President Emmanuel Macron’s proposed gas-tax hike. Carrefour and Vinci are the two worst performing stocks in the CAC40 Index today, which is up 1.00% on the day. Consulting firm MKG said last week that earlier protests on November 24th resulted in the cancellation of 10mm euros of hotel reservations. Accor is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Vinci is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. Carrefour is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Apple (AAPL) will not introduce an iPhone that can use 5G services until 2020 according to a report from Bloomberg today.  Apple will wait until almost a year after the introduction of 5G technology to take advantage of the new, faster technology, the same way it did when 4G was introduced.  Apple did this in the past to avoid the inevitable early problems with the new service, preferring to wait until it is fully introduced.  Apple is rated “Attractive” in our US Large-Cap and US Information Technology Global Top Stock Ideas. 
  • Bayerische Motoren Werke AG (DB: BMW)Daimler AG (XTRA: DAI)Volkswagen AG (XTRA: VOW3), and other global automobile manufacturer shares traded higher after US President Donald Trump and China agreed to remove tariffs on American-made cars that severely hindered the global automobile manufacturing industry. BMW is rallying the most in three years on the news. BMW is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Daimler is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Crocs (CROX), the maker of rubbery shoes, will buy back from Blackstone Group (BX) half of the preferred shares Blackstone holds and acquired as part of its original investment in Crocs.  Crocs will pay USD$183m for the shares and will convert those shares to common shares.  Blackstone Group agreed to convert its remaining stake to common shares as well and to not trade those shares for 9 months.  Crocs has turned around its operation over the last 3 years with the help of Blackstone.  Crocs is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  Blackstone Group is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • CVS (CVS) and Aetna merged last week, and a federal judge is now ordering them to justify the merger.  The US Justice Department approved the merger with some stipulations, but a federal law known as the Tunney Act requires a federal judge to approve these types of mergers.  The judge in this case is very unhappy the Justice Department has not involved him up until this point and so has made this demand of the companies, as he is permitted to do.  CVS is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Deere & Co (DE) are strong on the positive news surrounding the US-China trade truce.  Deere & Co could see a demand boost as a result of a final agreement if it comes, according to a note from Baird today.  The note discusses the demand Deere is seeing for its equipment with precision technology embedded in it and how any further demand increase from China could speed up the deployment if this newer technology.  Deere said last month it sees robust demand going into 2019.  Deere is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Discovery (DISC.A) shares are trading lower after President and CEO David Zaslav discussed at an industry conference that the firm’s flagship Discovery Channel, “has some ratings challenges, but is still the number 1 channel in America for men.” While speaking at the annual UBS Media Investor Conference in New York, Zaslav added that the weaker ratings would drive US advertising revenue for the fourth quarter “a little” below previous expectations of between 3% and 5% growth. Discovery is not rated in our Global Top Stock Ideas. 
  • Former General Electric (GE) employees are cited in a Wall Street Journal report that alleges General Electric’s insurance business of failing to acknowledge worsening results over recent years, leading to the turmoil surrounding the large conglomerate. The Wall Street Journal additionally reports that federal investigators are questioning these former General Electric employees in relation to a probe of the conglomerate. General Electric is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas. 
  • GlaxoSmithKline Plc (LSE: GSK) shares traded lower after announcing the acquisition of Tesaro Inc. (TSRO) for GBP 4bn (USD$5.1bn). The acquisition price, which translates to an offer price of USD$75/share, is a roughly 62% premium on Tesaro’s Friday’s close. The move to acquire Tesaro, whose stock is down 44% YTD, is a move by CEO Emma Walmsley to revitalize the company’s cancer drug pipeline. GlaxoSmithKline Plc is rated “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas. Tesaro is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Glencore (LSE: GLEN) has announced that its billionaire had of copper trading and one of the firm’s largest shareholders Aristotelis Mistakidis has retired. With a reputation as one of the world’s most powerful commodity traders, Mistakidis retired amid intense pressure faced from a string of investigation and legal headaches pertaining to the US Department of Justice’s probe of Glencore’s dealings in the Democratic Republic of Congo. Glencore is rated “Neutral” in our European Large-Cap Global Top Stock Ideas and “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Lululemon (LULU) is in talks to join a Chinese investor group attempting a takeover of Amer Sports Oyj (AMEAS FH) according to a report in Bloomberg today.  The report states that Lululemon is in talks to take about 20% of the deal, though nothing has been confirmed officially.  Lululemon is rated “top Buy” in our US Large-Cap Global Top Stock Ideas.  Amer Sports Oyj is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • MGM China (2282 HK) shares were up strong overnight on a report from JP Morgan.  JP Morgan said the November gaming revenue growth was impressive, growing at 8.5% in November.  JP Morgan said most important is that the strong numbers bear estimates that were increased recently, the median consensus was for 4% growth.  MGM China is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Nexstar Media Group (NXST) announced an all-cash acquisition of Tribune Media Company (TRCO) for USD$4.1bn. Including the cost of debt acquisition, the total acquisition value comes to USD$6.4bn. The per share acquisition price represents a 15.5% premium on shares of Tribune Media as of Friday’s close. Nexstar Media is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. Tribune Media is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Qualcomm (QCOM) said it has ruled out any other bids for NXP Semiconductor (NXPI) after the US and Chinese negotiations appeared to open the way to potentially approve the deal.  Qualcomm, in a note to the market, said it was grateful for the work of both the countries but that it has abandoned the deal and has no plans to revisit it.  It said, “Qualcomm considers the matter closed”.  Qualcomm is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  NXP Semiconductors is not rated in our Large-Cap Global Top Stock Ideas.
  • Roku (ROKU) was upgraded today at DA Davidson to buy from neutral.  Roku’s price target of USD$49 was reiterated.  The trade progress between the US and China is positive for Roku, according to DA Davidson, and the competition from Amazon is well priced into the stock already.  Roku is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • RPC Group Plc (LSE: RPC) shares fell after announcing that talks with potential buyers are narrowed to Apollo Global Management after Bain Capital dropped its bid. Apollo Global Management, a US-based private equity company, has until December 21st, 2018 to make an official offer for RPC Group or to end its pursuit. RPC Group is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Unilever (UNA NA) agreed to buy GlaxoSmithKline’s (GSK LN) Indian consumer business for US$3.8 billion.  Unilever is looking to expand its presence in the fast growing economy.   Unilever has been looking to expand further in emerging markets, where it already gets two-thirds of its revenue.  Unilever is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.  GlaxoSmithKline is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.  
  • Sands China (SEHK: 1928) shares traded higher by double-digits after Macau casinos announced November revenue that topped analyst estimates. Macau saw gross casino revenues grow 8.5% y/y to 25bn patacas (USD$3.1bn) while analysts expected growth of just 4%. Analysts had already revised estimates upward in weeks leading up to the announcement, adding to the magnitude of the beat. Sands China is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • The Walt Disney Company (DIS) will abandon Comcast Corporation’s (CMCSA) FreeWheel advertising platform in favor of Alphabet’s (GOOGL) Google Ad Manager in relation to its video streaming service. The trend towards digitally native advertising solutions is one being seen across the online television advertising space. Of late, Alphabet has signed deals with CBC, A&E Networks, and AMC Networks to use its Google Ad Manager service. Disney is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. Comcast is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Verizon (VZ) has been downgraded by JP Morgan to neutral from outperform.   Verizon’s price target was reiterated at USD$62.  Verizon has outperformed the SP500 by 13% recently and JP Morgan highlighted this when downgrading the stock.  Verizon is fully valued at this point, in JP Morgan’s opinion. Verizon is rated is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 3.46 basis points to 2.82%
  • US 5-Year Treasury Bonds are lower with yields up 0.84 basis points to 2.82%
  • US 10-Year Treasury Bonds are higher with yields down -1.64 basis points to 2.97%
  • The US Treasury 2s-5s Spread has narrowed 2.62 basis points to 0%
  • The US Treasury 2s-10s Spread has narrowed 5.1 basis points to 0.15%
  • US Treasury 5s-10s Spread has narrowed 2.48 basis points to 0.15%

Currencies

  • EUR€ is up 0.274% against the USD$ in after hours to 1.1348
  • GBP£ is down 0.157% against the USD$ in after hours to 1.2729
  • CHF is little changed 0.03% against the USD$ in after hours to 1.0018
  • JPY¥ is little changed 0.053% against the USD$ in after hours to 113.63

Commodities

  • WTI Crude is up 3.97% to USD$52.95/bbl with the Brent-WTI spread up USD$0.5 to USD$8.1/bbl
  • Gold is up 0.85% to USD$1230.89/oz
     

 

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

S&P 500 Sector ETFs - End of Day

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

Russell 1000 Factor ETFs - End of Day

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

 

S&P 500 Movers

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Outperformers Sector Price 1D % Chg Volume
Discovery Inc Communication Services 31.6 -8.20%            3,868,203
Discovery Inc Communication Services 28.7 -7.38%                878,099
Activision Blizzard Inc Communication Services 52.6 -6.58%            8,648,852
HollyFrontier Corp Energy 61.7 -5.79%                660,081
Take-Two Interactive Software Inc Communication Services 112 -5.66%            1,736,813
 
Underformers Sector Price 1D % Chg Volume
Advanced Micro Devices Inc Information Technology 21.4 11.31%          27,823,370
Wynn Resorts Ltd Consumer Discretionary 108 9.50%            1,703,029
Twitter Inc Communication Services 31.3 7.03%            4,838,743
Estee Lauder Cos Inc/The Consumer Staples 142 7.00%            1,203,306
Devon Energy Corp Energy 26.9 6.44%            2,925,124